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Frequently Asked Tax Questions about Delaware

Courtesy of Active Adults Delaware

CAN I GET PRIVATE HEALTH INSURANCE?

This is important to retirees who are not yet 65. There may be a gap of 5 years or more between the time that they are no longer covered by the health insurance of the company they worked for and their eligibility for Medicare. Or, perhaps they have been self-employed with coverage by a company that may or may not write insurance policies in Delaware.

IS THERE A SALES TAX ON AUTOMOBILES?

No, but when you bring a vehicle into Delaware there is a one-time document fee, a.k.a. transfer tax of 4.25% of the purchase price or NADA book value, whichever is greater. Minimum document fee is $8. For more details, visit the Delaware Division of Motor Vehicles online at www.dmv.de.gov. Does Delaware have an Income Tax? Yes, Delaware does have an income tax that ranges from a low of 2.2% to a high of 5.95%, depending on your income bracket.

For more details please visit the DMV online or call the Delaware Division of Motor Vehicles at 302.853.1000 for Sussex County. http://www.dmv.de.gov

IS SCHOOL TAX EXTRA?

In Delaware, School Tax is included and billed as part of your County Tax. That is important because homeowners age 65 and over (once you have been a primary resident for 3 years) may get a credit equal to or half of the school property taxes, up to $500. Taxpayers must pay their property tax bill in full by the end of each tax year in order to qualify for this credit for the subsequent property tax year. Learn more about how to qualify for the School Property Tax Relief for Individuals Age 65 or over – Read More http://finance.delaware.gov/publications/proptax/propmain.shtml

DOES DELAWARE HAVE AN INCOME TAX?

Yes, Delaware does have an income tax that ranges from a low of 2.2% to a high of 5.95%, depending on income bracket. Standard deductions are $3250 if you are single and not itemizing or $6500 if married, filing jointly and not itemizing. For more details, see Delaware’s Tax Structure. http://revenue.delaware.gov/

DOES DELAWARE TAX SOCIAL SECURITY?

No, Social Security and Railroad Retirement Benefits are exempt from Delaware Income Tax.

WHAT ABOUT A RETIREMENT INCOME TAX?

Tax payers 60 years old and older may exclude $12500 of investment and qualified pension income. Out of State government pensions qualify for the pension exemption. Under age 60, $2000 is exempt.

ARE THERE PERSONAL PROPERTY TAXES?

There is no personal property tax in Delaware.

PROPERTY TAX… WHAT SHOULD WE KNOW?

All real property is subject to tax unless specifically exempt. Personal property, tangible and intangible property is exempt. Real Estate is subject to county, school district, vocational school district and municipal taxes. The state offers various property tax relief programs for residents age 65 and older and for residents with disabilities. Homeowners age 65 and over may get a credit equal to one-half of the school property taxes, up to $500.